The present invention is related to loan products, and more specifically to a principal first loan product.
Currently, there are many types of loan products available and offered by different financial institutions. Traditional loan products require a borrower to make principal and interest payments with mostly interest being applied in the beginning years of the loan. Interest-only products require the borrower to pay interest-only payments, with nothing being applied to principal until after the interest-only period. Option adjustable rate mortgage (ARM) products allow a borrower to choose a payment option, but has the possibility of negative amortization. Current loan products help people afford a loan or mortgage but do not help them pay off the loan.